Noble-Delek, Gas Pipeline Between Israel and Egypt – Leviathan and Tamar, Slippery Business

Talks under way to build new gas pipeline to Egypt, Israel says

Talks are in progress to build a new underwater gas pipeline between Israel and Egypt, part of efforts to transform the eastern Mediterranean into an energy export hub on Europe’s doorstep, Israeli Energy Minister Yuval Steinitzsaid. Israeli gas stocks rose.

Construction could begin as early as next year on the pipe to transport gas from Israel’s offshore Leviathan and Tamar fields to Egypt’s existing liquefied natural gas plants for processing and re-export, Steinitz said.

The new line would allow Israel to export much more to Egypt than the maximum 7 billion cubic meters per year that can flow through the existing EMG pipeline connecting southern Israel to Egypt’s Sinai peninsula.

“There’s no final decision yet, but there are talks,” Steinitz told Bloomberg in an interview in Cairo, where he took part in the first East Mediterranean Gas Forum. The event was aimed at boosting cooperation among the region’s nascent gas producers, consumers and transit countries. The next meeting will take place in April.

Oil ministers from EgyptIsraelGreeceCyprusJordanItaly and the Palestinian Authority joined the gathering Monday, where they agreed to work together to monetize reserves by using existing infrastructure and adding more capacity.

The meeting came nearly a year after the signing of a $15-billion deal to export Israeli gas to Egypt over a decade – a landmark deal reached after years of litigation.

The companies developing reservoirs in Israel and Cyprus, led by Noble Energy and Delek Drilling, are working on a deal to sell around 12 bcm of natural gas to the Idku LNG facilityin Egypt, which is partly owned by Royal Dutch Shell. Progress has been held up by a dispute between the Israeli and Cypriot governments over the development of the Aphrodite field that straddles both countries’ economic waters.

Shares of Delek climbed as much as 2% on the news. Ratio Oil Exploration 1992 LP, which owns 15% of Israel’s Leviathan, also gained as much as 2% in Tel Aviv trading.

Steinitz is the first Israeli minister to visit Egypt since the 2011 uprising that ousted President Hosni Mubarak, and his attendance reflects growing Egyptian openness toward cooperation with Israel. The two countries signed a peace deal in 1978, but ties had remained frigid for decades.

“Today’s meeting is extremely important, as it delivers a very important message to the international community that we’re working together in order to exploit our natural resources,” Steinitz said.

EMG EXPORTS
Egypt’s East Gas and the companies developing Israel’s largest natural gas fields agreed in September to buy 39% of the East Mediterranean Gas, which owns the existing pipeline once used to export Egyptian gas to Israel. The buyout will allow the pipeline to transport gas in the other direction.

Steinitz said Egypt would begin to receive small quantities of Israeli gas through the EMG pipeline in April. Significant quantities would begin to flow in October or November, and the pipeline could reach full capacity next year.

LINK TO EUROPE
Major offshore gas finds have transformed the eastern Mediterranean region into an energy hot-spot.

Steinitz said work on the planned subsea East Med pipelinethat will connect Israel, via Cyprus, to Greece and Italy was expected to start next year, and would take five or six years to complete. The European Union estimates the initial cost at $7-billion, with construction expected to be financed by private companies and institutional lenders, he said.

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Price Hikes in Israel, the Cost of Privatization and Capitalism?

JERUSALEM, Dec 19 (Reuters) – In a bid to quell growing frustration over the rising cost of living in Israel, Prime Minister Benjamin Netanyahu said electricity prices will rise less than the planned 8 percent.

“The price of electricity is significantly lower than in Europe and I tell you that it will not rise 8 percent,” Netanyahu told the Globes business conference on Wednesday.

“I do not know how much it will rise but a few percent in the worst case.”

The price of electricity was set to rise as much as 8 percent on Jan. 1, while a host of other prices — from food to water to municipal taxes — are also supposed to go up in 2019.

With Israel heading into an election year, the rise in living costs has touched a nerve with the public, bringing back memories of huge protests in 2011.

A new wave of protests has begun in similar fashion to those in France, where protesters are wearing yellow vests.

Netanyahu said electricity costs have dropped 15 percent since 2013, after the Tamar natural gas field opened off Israel’s Mediterranean coast. He said the larger Leviathan gas field, slated to start production in a year, would lower electricity rates further.

Ram Shefa, one of the organizers of recent protests against rising living costs, said the plan to raise electricity rates meant Israel’s gas production was only benefiting the owners of the gas fields, Noble Energy and Delek Group.

Assaf Eilat, chairman of state-run utility Israel Electric Corp, told parliament’s economics committee on Tuesday the average electricity hike would be about 7 percent.

“Even after the rise, the price of electricity in the last five years has fallen 10 percent,” Eilat said.

The high cost of living sparked mass protests in 2011 and significantly impacted the 2012 general election, with candidates promising to lower the cost of basic items.

Osem, Israel’s third-largest food maker which is owned by Nestle, had planned a 4.5 percent price hike but on Wednesday postponed the increase following public pressure and a request by Finance Minister Moshe Kahlon.

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Delek, Noble, Tamar, Leviathan, Dolphinus – Who’s Gas is this Anyway?

Delek, Noble sign accords for $15b in sales of Israeli natural gas to Egypt

Partners in the offshore Tamar and Leviathan fields ink deals with Egypt’s Dolphinus Holdings Ltd. for the sale of some 64 billion cubic meters over coming decade

 

Illustrative photo of a natural gas field in the Mediterranean Sea (Moshe Shai/FLASH90)

 

The partners in Israel’s Tamar and Leviathan natural gas fields, including a unit of US Noble Energy Inc and Delek Drilling LP, have signed $15 billion in deals to export natural gas to Egypt over 10 years.

In a filing to the Tel Aviv Stock Exchange on Monday, Delek Drilling LP, a partner in the Tamar and Leviathan fields offshore Israel, said Noble Energy Mediterranean and its partners in the fields have signed accords with Egypt’s Dolphinus Holdings Ltd. for the sale of some 64 billion cubic meters of natural gas from the two fields.

One accord calls for the sale of 3.5 BCM of natural gas annually from the Leviathan field, for a total of 32 BCM, the filing said, with the partners estimating the total revenues from the sale from the Leviathan field to reach $7.5 billion.

In addition, the partners said they signed an additional accord for the sale of natural gas from the Tamar field, for a total of 32 BCM and some $7.5 billion.

Delek said the partners were considering various options for the supply of the gas to Egypt, including via a Jordanian-Israeli pipeline that is currently being built or the use of the existing East Mediterranean Gas pipeline. Delek Drilling and Noble plan to start negotiations with EMG for the use of the pipeline to Egypt, the companies said in a separate, emailed statement.

Another option is to transport the gas to Egypt by connecting the Israeli transmission system to its Egyptian counterpart, the statement said.

Supply from Tamar will start as soon as the infrastructure for its transport is in place, the companies said, while that from Leviathan will start as soon as production starts from the well. Supply will continue until the amounts agreed upon are supplied or until December 2030, whichever comes first, the companies said.

…..

“We are at an important milestone on the road to realizing our collective vision and dream of making Israel a significant exporter of gas to countries in the region,” said Yitzhak Tshuva, the controlling shareholder of Delek Group, which controls Delek Drilling. “The agreement will strengthen the relationships between Israel and its neighbors and increase economic cooperation between them.”

Dolphinus is a natural gas trade company which is planning to supply gas to large industrial and commercial consumers in Egypt.

Noble Energy holds 39.66 percent of Leviathan and a 32.5% stake in Tamar. Delek Drilling holds 45.34% stake in Leviathan and 22% stake in Tamar. Ratio Oil Exploration (1992) Ltd. Partnership holds a 15% stake in Leviathan. Isramco Negev 2 LP holds a 28.75% stake in Tamar.

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Delek-Noble Energy – Israel, A Leviathan of a Profiteering Venture…

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Delek-Noble Energy announces $500m deal to allow Israeli gas exports to Egypt

US-Israeli consortium and Egyptian gas company buy 39% of disused underwater gas pipeline connecting Ashkelon to northern Sinai

 

A US-Israeli consortium leading the development of Israel’s offshore gas reserves announced Thursday a deal that would enable the export of natural gas to Egypt.

Noble Energy and its Israeli partner Delek, along with Egyptian East Gas Company, bought 39 percent of a disused pipeline connecting the Israeli coastal city of Ashkelon with the north Sinai.

The consortium paid $518 million for the interest in the East Mediterranean Gas Company pipeline.

The mainly undersea pipeline will be used to transport natural gas from the Tamar and Leviathan reservoirs to Egypt from as early as 2019, allowing a 10-year $15 billion deal signed in February with Egypt’s Dolphinus to move forward, Delek said in a statement.

It will be the first time Egypt, which in 1979 became the first Arab country to sign a peace treaty with Israel, imports gas from its neighbor.

Israel had bought gas from Egypt but land sections of the pipeline were repeatedly targeted by Sinai jihadists in 2011 and 2012, and soaring demand meant Egypt could use the gas domestically.

Israel had bought gas from Egypt but land sections of the pipeline were repeatedly targeted by Sinai jihadists in 2011 and 2012, and soaring demand meant Egypt could use the gas domestically.

Delek CEO Yossi Abu called the pipeline purchase “the most significant milestone for the Israeli gas market since the discoveries” of the reservoirs.

“The Leviathan reservoir is becoming the Mediterranean basin’s primary energy anchor, with customers in Israel, Egypt and Jordan,” he said.

In September 2016, Jordan struck a deal to buy 300 million cubic feet (8.5 million cubic meters) of Israeli gas per day over 15 years, an agreement estimated to be worth $10 billion.

Israel has limited natural resources but in the past few years it has discovered major gas fields off its coast and is building the infrastructure needed to tap them.

Tamar, which began production in 2013, has estimated reserves of up to 238 billion cubic meters (8.4 trillion cubic feet).

Leviathan, discovered in 2010 and set to begin production in 2019, is estimated to hold 535 billion cubic meters (18.9 trillion cubic feet) of natural gas, along with 34.1 million barrels of condensate.

Israel hopes its gas reserves will give the country energy independence and the prospect of becoming a supplier for Europe as well as forging strategic ties within the region.

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